Economics in a Perfect World

Last week I wrote an article critical of capitalism in part because the Pope had also released a document critical of capitalism. (His was better.) This week I am unsurprised and somewhat glad to find that a number of conservative political commentators have come out against the Pope’s statements (and have mangled them in a familiarly short-sighted way). I say I am unsurprised because as I said in the last article capitalism is religion for some people. I am glad because any situation in which someone whose first religion is capitalism has to say, “And yes, this puts me at opposition with the Pope,” is a situation in which the truth becomes clearer. This is especially valuable when the capitalist at hand also holds on to a large Christian audience through professions of Christian faith.

However, one of the other unsurprising things about these critiques is that they get the facts wrong. Many of these commentators said that the Pope favored government control of the economy. Oddly enough, the Pope never made any policy suggestions. He simply claimed that the current course of unfettered capitalism was not going to get us to a morally-acceptable place. One of the more common mental traps is the false dichotomy – the belief that there are only two options when there are more. Politics (in the United States at least) steers one towards false dichotomies: there’s our way and the bad way. It is completely unsurprising to see that people who live in the mentally-poisonous atmosphere of politics can fail to notice that when the Pope criticized capitalism he did not endorse communism. To realize this requires being able to separate the Pope’s advice on a personal moral level from policy decisions. A failure to manage this ends in theocracy.

I will circle back around to theocracy in a bit but let’s first talk about communism. Let’s reduce it to an economic system alone – ignore what Marx had to say about religion and culture, throw the tendency for communism to come about through unelected governments out the window, let’s just talk communism as an economic system. As I said last time the critique to level against communism is simple: it doesn’t work. Communist countries fix their economies by becoming less communist. The simple fact is that if people are not going to be paid any differently based on job performance they won’t perform1.

Now imagine a mostly-Christianized world. This requires far too much restructuring of everything that we know to think easily about all the ramifications of this but imagine a world in which most people are not just Christian but take it seriously. What happens if someone is poor? Well, obviously they are taken care of. People with resources donate to those who lack them. If this happened at the hands of a government we’d refer to this as wealth redistribution. If a committee of the proletariat came together and decided who got what instead of church members we’d call this pure Marxism2.

The odd fact is that the reason Marx’s ideas don’t work is that not enough people live good Christian lives. In a suitably-Christianized world Marx would never have proposed a governmental system to redistribute wealth because religious charity would already do that.

This brings us back to that issue of theocracy. To the theocratic mind if something is a moral idea the government should do it. If a suitably Christian society would redistribute wealth through the private virtue of Christians then the government should force this behavior. To this sort of mind there is no difference between saying, “It is immoral to do X,” and banning X. This would not work well for capitalism since capitalism runs on one of the more prominent sins, greed. There are two issues with theocratic minds (besides their essential incorrectness): the first is that theocratic minds breed theocracies that, like communism, don’t work. The second is that theocratic minds can run backwards.

Take capitalism again. It’s fairly obvious that capitalism runs on sin. It could run on something like the moral virtue of trying to improve people’s lives but what it actually runs on is selling people trinkets by convincing them that trinkets will make them happy. A lot of this greed is sparked by advertising that hooks people using other baseline sins: lust, pride, and sloth are big these days. For a theocratic mind endorsing capitalism this is a problem since government policy should perfectly align with what is morally right. The government should not compromise and create working systems that are more damaging than certain unworkable systems would be if they worked. Now the theocratic mind can run backwards. If capitalism is the correct policy then greed, and lust, sloth, pride, envy, and anything else needed to grease its wheels must be morally acceptable. To a non-theocratic mind this sort of reasoning is obviously nonsense. I don’t believe people should go around getting drunk but I don’t want to see a law against it. I can see that it would be worse to have a law against the bad behavior than have the bad behavior and some laws to limit its consequences. I can see that capitalism is a compromise between perfect care for God’s children and something that works and say, “Ok, that’s the way it needs to be,” and use tools like charity to try to bridge the gap3. However, the theocratic mind likes a flat world and so we can’t have one set of rules about personal behavior and another for legal behavior.

Ayn Rand is a very good example of this. Ayn Rand took a stance about economics and worked it backwards. If it is bad for the government to give charitably then it is bad for everyone to give charitably. If the best economy comes about by the clash of great economic powers and the victory of economic strength over economic weakness then it is also wrong to interfere in that clash on the small-scale. While I think Rand is wrong in a very scary sort of way I have to admire her philosophical consistency4. Many of her followers try to have it both ways and end up believing impossible combinations of things.

Part of this is again the issue with making economics religion. If your religion is capitalism (or libertarianism – most devout capitalists favor this term these days) then you really can’t separate economic policy from moral good. You have to be an economic theocrat at the very least because your theology is economic. Jesus may get the rest of your life (or may not – serving two masters is notoriously difficult) but he just gets his name rubber-stamped on your economics whether he wants it there or not.

The real problem is poor-quality thinking. Economics can be a religion. Is there any reason why not? Why should personal moral rules (which are frequently aimed at one’s internal state) be the outer rules for governments (which try to avoid dealing with your internal state)? When do these categories need to run together? Where do we make compromises between what works and what doesn’t but would be better if it did? I generally think we shouldn’t make those compromises at all in our personal lives (or, if we make them, we should drive a very hard bargain in favor of the unworkable) but does that hold when we discuss the policies of nations? If none of these questions are asked then room is left for answers that make sense only because the questions weren’t very good.

Theocratic minds are flat minds without dimension. Most bad thought is like that. The real world is extremely complex. Real moral decisions often reflect that complexity. Real solutions to real problems must take that complexity into account. Economics is no exception and it’s a pity that our economic conversations are so frequently dominated by simplistic extremes.

[1] Except in close-knit communities. There are plenty of groups that have communal property and chores that get them accomplished because everyone knows when you broke something or slacked off an applies social pressure to make you stop. This doesn’t work in a group where the person who needs to use the widget you broke doesn’t know who you are.

[2] Assuming we’ve read Marx and don’t just use “Marxism” to mean “whatever I think the Soviets did”.

[3] This is where Christian experts come in. I’m not an economist and so I don’t know how the system could be tweaked to be workable and still give better outcomes. Someone does though and so we need their expertise steered by Christian goals. This is how to be a Christian in one’s profession – do what you do well and do it with Christian aims in mind.

[4] What is good about Rand – her unwillingness to back down from scary conclusions – is also what is bad about her. Most people would be (and are) restrained from Rand’s moral conclusions by their horror. In some cases horror is a way to scare people away from the truth. In this case it’s a way to keep people from being horrible.

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Even beyond religion/theocracy, I really don’t think we have a good cultural category for stuff that isn’t outright immoral/unethical/illegal, but may not be a good idea or require moderation. That seems to be a factor in the assumptions that the Pope has a political agenda. (I suspect it’s also projection–the people making these claims always have an agenda of one sort of or another, so they assume everyone must.)

Also, I wholeheartedly agree–while it’s often messy and ugly, I’m glad when people are forced to explicitly choose sides between political/economic religion and Christianity.

I think the general trend is the theocratic trend. We don’t know how to handle things that are immoral but should not be made illegal. Instead we end up with systems where legal = moral. These are theocratic systems. (Or we end up with systems that stray to the opposite error and assume that because legal does not mean moral morality should have as little as possible to say about legality.)